Freeze & 40: A Plan for Pension Reform in JacksonvilleMarch 3, 2014 12 comments Print Article
A Proposal to Reform the Jacksonville Police and Fire Pension Fund and Restore Jacksonville’s Financial Future submitted by Tom Majdanics, Michael Yang, Christopher Owens and Felisa Franklin Read their proposal and respond with suggestions if you like! Join us for some serious wonky analysis after the jump!
The condition of the Jacksonville Police and Fire Pension Fund is presently the greatest threat to the short- and long-term financial health of our city government and Jacksonville’s future quality of life. While the problem of solving the PFPF’s $1.7 billion liability is incredibly daunting, it is fixable. There is a way forward. We have presented what we believe is a principled and fair solution that preserves financial peace of mind of retirees, limits the burden of taxpayers, and repositions the City of Jacksonville’s finances for success.
At the heart of our reforms is modernizing the system of retirement benefits provided to police and fire employees. The current system is outdated, risky, overly complex, and opaque. It is also prone to manipulation through the political adjustment of key actuarial assumptions that allow expensive and unsustainable pension benefits to be initially presented at a cost to taxpayers that far understates proper financial reality. This pattern has manifested itself across the nation, creating trillions of dollars in unfunded pension liabilities that are threatening the financial future of numerous U.S. state and local governments. To put it mildly, the first cities to truly face the full brunt of their pension problems, such as Detroit and Stockton (California), have not fared well. Jacksonville must take a different path to preserve our quality of life and competitive tax levels which fuel future economic growth.
The solution, in our opinion, requires the shared sacrifice of taxpayers and both PFPF current and future employees and retirees. In our proposal, taxpayers can continue to maintain a limited tax burden, but prevailing property tax rates will remain significantly above levels assessed just 5 years ago. Employees and retirees can continue to plan on retirement with financial peace of mind and security. But those who anticipate collecting millions of dollars of growing pension benefits over 40+ years – levels far above those offered to men and women in the U.S. Military – will need to adjust their expectations. The problem cannot be wholly solved by placing the entire burden for the $1.7 billion unfunded liability on taxpayers. It cannot be wholly solved by current employees and retirees and taking away the financial peace of mind of their retirement. It cannot be wholly solved by slashing the benefits of new policemen and firemen or marring our ability to attract and retain top talent to our public service departments.
We hope our reform proposals positively shape the present pension debate in Jacksonville. Please send any comments to firstname.lastname@example.org. We would appreciate your feedback to make these reform proposals stronger, as our city’s best thinking will be needed to arrive at the very best solution for Jacksonville.
Jointly, this problem was created. Jointly, it can and will be solved.
Details on Jacksonville Police and Fire Pension Fund Finances and Benefits:
• Jacksonville Police and Fire Pension Fund Comprehensive Annual Financial Reports (CAFRs), FY
2008-2012 (not available online);
• Jacksonville Police and Fire Pension Fund Actuarial Valuation Reports for FY 2008, 2011 and
2012 (not available online)
• PFPF Summary Plan Booklet: http://www.coj.net/departments/police---fire-pensionfund/
US Military Pension and Survivor Benefits:
Jacksonville Sherriff’s Office – Police Officer Salaries:
Investment Fees paid by PFPF vs. State of Florida retirement system:
Current and Historical Jacksonville Property Tax Rates:
Historical City Contributions to the PFPF: